Florida’s Citizens Property Insurance announced that it has secured a $3.56 billion reinsurance program for 2024.
The state insurer explained that this includes slightly more than $3 billion in new placements and $500 million in existing, multiyear coverage from 2023.
The reinsurance program will cost approximately $482 million, according to a report by AM Best. According to the summary, the program has an average gross rate on line (ROL), the ratio of premium paid to losses recoverable, of 14.07% and a net ROL of 13.44%.
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Citizens also noted that the gross and net ROL for 2024 are lower than those in the 2023 program.
Citizens attributed the lower cost of the program, 7.9% cheaper than similar coverage in 2023, to softened markets due to additional capital in the reinsurance market, which is seeing better ROI than other asset classes.
The insurer also noted that the impact of insurance litigation reforms is driving optimism among reinsurers, with the effects of those changes just beginning to be realized. Research from the Insurance Information Institute found that home insurance premiums were 80% lower than initial projections in 2023, largely due to legal system reforms.
Read More: Florida property reinsurance dependency remains high – AM Best
In May, Citizens' board authorized a $5.5 billion reinsurance package with a cost cap of $750 million. The insurer did not specify why the secured package amount was lower but mentioned it worked with reinsurance partners to market its risk transfer program through “roadshows and one-on-one meetings with reinsurers and investors.”
In 2023, Citizens was the largest homeowners multi-peril insurer in Florida based on direct premiums written, holding an 18.75% market share.
Other leading carriers in the state included Universal Insurance Holdings Group with 8.47%, State Farm Group with 6.88%, Florida Peninsula Group with 4.88%, and Tower Hill Group with 4.35%.
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